Phill, quit while you are ahead. It is my opinion, as a person highly familiar with the markets in question, that Hillary Clinton's profits were impossible to achieve by any means other than fraud, and that no honest broker would have allowed her to hold positions in which she was so far out of mandatory margin requirements and a trivial move would have wiped out her entire net worth and more. I do not know of a single professional in the industry who disagrees with me. I know of at least one extremely well written study, by Victor Neiderhoffer (a very successful futures trader) and Caroline Baum (a reporter for Telerate) that more or less demonstrates that there is no way that any of what happened could have been legitimate. The most astounding part of the trading pattern was that Hillary Clinton did not "let it ride" and earn the money off of repeated increases in the value of a single investment -- instead, she took all profits out of her account after each trade and never invested more than a tiny sum in any transaction. That is to say, she didn't earn modest profits repeatedly over many trades -- she earned nearly impossible profits in trade after trade. In spite of withdrawing her profits after each trade, she racked up an impossible profit of 100 times her initial investment in a tiny period of time. At no time did she meet margin requirments, and she repeatedly risked more than the Clinton's entire net worth on what would have been gambles had her profits not been guaranteed. In spite of her astounding "performance" she immediately stopped trading after $100,000 in profits had been accumulated. There is an obvious trick by which this can be achieved. The broker writes two tickets -- one to buy, one to sell. One ticket always loses exactly what the other gains. The winning ticket is assigned to the bribee, the loser to the person doing the bribing. The mechanism self-launders the funds. Hallam-Baker writes:
Point of fact: the skeleton closet does not know how traded options work.
Mr. Baker, she traded FUTURES.
If one sells a traded option one is liable to pay the broker if the market moves the opposite way to that hoped for. Normally the broker asks a client to put up a deposit or "margin" to ensure that the broker can recoup the money.
Margin requirements are set by the exchanges and the CFTC, not by the broker in most cases. They are required by law -- not under broker discretion.
In this case the broker knew that Hilary had good credit and so accepted only a token deposit as "margin".
He's not allowed to. Furthermore, no sane broker would have allowed a customer to hold a position in which a small move would have more than wiped out the customer's entire net worth.
In most cases it is profitable to sell options,
Futures, Mr. Baker.
it is only if the market moves in the "wrong" direction that one can lose out. In such cases the losses are unlimited - the potential profit being fixed. This is why most punters buy options - the potential loss is limited.
Hillary Clinton was trading FUTURES. Perry